The Central Bank of the UAE (CBUAE) has raised its GDP growth forecast for 2024 to 4 percent, up from 3.9 percent, driven by improved performance in the oil sector.
For 2025, the bank anticipates stronger growth of 6 percent, fueled by momentum in the non-hydrocarbon sector and a significant rise in hydrocarbon production.
According to the CBUAE's Quarterly Economic Review, the non-hydrocarbon sector will play a pivotal role in driving economic growth. Key industries such as tourism, transportation, financial services, construction, and real estate are expected to continue their upward trajectory. The government's strategic reforms, including 100 percent foreign business ownership and tax reforms, are boosting foreign investments and economic activities.
Non-hydrocarbon GDP growth is projected at 5.2 percent in 2024 and 5.3 percent in 2025. Meanwhile, the hydrocarbon sector is expected to expand by 0.7 percent in 2024, followed by a substantial 7.7 percent growth in 2025 as oil production increases.
The fiscal outlook for the UAE remains strong. The fiscal surplus for the first quarter of 2024 stood at AED 23.5 billion, with consolidated budget revenue reaching AED 120.6 billion, a 4.3 percent year-on-year increase. This growth was driven by a 32.5 percent surge in tax revenues, largely attributed to the newly implemented corporate tax.
Government spending rose by 5 percent year-on-year to AED 97.1 billion, with significant increases in employee compensation, goods and services usage, and social benefits. Capital expenditure also surged, rising more than sevenfold to AED 5.6 billion, further supporting the country's infrastructure projects.
The positive trends in employment and wage growth are expected to sustain robust domestic consumption and economic expansion.
News Source: Emirates News Agency
